Kingspan Full Year Results. 23rd February 2018

Transcription

1 Kingspan Full Year Results 23rd February 2018

2 Disclaimer Forward Looking Statements This presentation contains certain forward-looking statements including, without limitation, the Group s financial position, business strategy, plans and objectives of management for future operations. Such forward-looking information involves risks and uncertainties, assumptions and other factors that could cause the actual results, performance or achievements of the Group to differ materially from those in the forward-looking statements. The forward-looking statements in this presentation reflect views held only as of the date hereof. Neither Kingspan nor any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this presentation will actually occur. Kingspan undertakes no duty to and will not necessarily update any such statements in light of new information or future events, except to the extent required by any applicable law or regulation. Chicora Elementary School, USA Insulated Panels 2

3 The Business > A global leader in high performance insulation and building envelopes > Market leading positions in UK, Continental Europe, The Americas and Australasia > Proprietary technology drives differentiation in product performance 5% Environmental 5% Access Floors 21% Insulation Boards 6% Light & Air 63% Insulated Panels 3

4 What We Deliver Excellence in Energy Architectural Inspiration Fully Integrated Envelope Solutions Building Science Comfort & Savings 4

5 2017 In A Nutshell 5

6 Our Strategy Be the leader in high performance insulation globally proprietary and differentiating technologies Be the world s leading provider of low energy building envelopes Greater geographic reach focus on The Americas, Continental Europe and certain developing markets 20% ROI target Innovation Net Zero Energy Penetration Globalisation 6

7 Completing the Envelope 7

8 1, , , , , Year Financial Performance Revenue ( m) (CAGR 19.9%) Trading Profit ( m) (CAGR 32.4%) 8

9 2017 In Summary Insulated Panels sales growth of 17% driven by a positive performance in Continental Europe and a solid outcome in North America offsetting a sharp slowdown in the UK towards year end. Insulation Boards sales growth of 12% owing to significant price inflation and a structural shift to Kooltherm in the UK, Ireland and Mainland Europe. Light & Air sales of 205m marking a strong first full year of trading and the development of a unique US and European footprint. Strong year for Environmental with ongoing improvement in profitability. Access Floors had a solid year albeit with a weakening UK backdrop. Revenue UP 18% to 3.7bn Trading Profit UP 11% to 377.5m Basic EPS UP 11% to 159.0c 9

10 Financial Highlights YoY % Change cc change* Revenue ( m) 3, , % +20% Trading Profit ( m) % +14% EBITDA ( m) % +13% Earnings per share (cent) % - Full Year Dividend (cent) % - Free Cashflow ( m) % - Net Debt ( m) m - Trading Margin 10.3% 11.0% -70bps - Net Debt/EBITDA 1.05x 1.06x - - ROCE 17.8% 17.3% +50bps - *constant currency 10

11 Trading Profit & Margin Progression Lintel Office Building, USA Insulated Panels FY 15 FY 16 FY 17 Insulated Panels 9.3% 11.2% 10.0% Insulation Boards 9.2% 11.4% 11.9% Light & Air n/a 4.7% 7.2% Trading Profit ( m) Environmental 5.1% 7.0% 9.0% Access Floors 12.1% 12.5% 11.8% Group Sales 9.2% 11.0% 10.3% 11

12 3, , Group Sales & Profit Bridge (10.0) (68.6) Sales ( m) Trading Profit ( m) 12

13 Strong Free Cash Flow WC/Sales 13.0% (85.3) (16.8) (61.6) (85.6) m EBITDA Working Capital Non Cash/Pension Interest Tax Net Capex Free cash flow 13

14 Net Debt Reconciliation (198.5) m Net Debt Dec 16 Free Cash Flow Acquisitions Dividend Shares issued/fx etc. Net Debt Dec 17 14

15 12.3% 13.4% 15.2% 17.3% 17.8% Growing ROCE The Word, UK Insulation 15

16 Strong Balance Sheet Total available cash balances and committed undrawn facilities of c. 901m 175m US Private Placement arranged in December 2017, drawn January year 500m revolving credit facility agreed in June 2017 Weighted average maturity of debt of 6.5 years. Queens University Belfast Insulated Panels 16

17 Sales by Geography Republic of Ireland 4% Republic of Ireland 4% 2017 Britain & Northern Ireland 25% Mainland Europe 44% Americas 20% 2016 Britain & Northern Ireland 27% Mainland Europe 41% Americas 20% Rest of the World 7% Rest of the World 8% m Constant Currency Change YoY % Change Britain & Northern Ireland % +9% Mainland Europe 1, , % +26% Americas % +17% Republic of Ireland % +17% Rest of World % +7% Group Sales 3, , % +18% 17

18 Insulated Panels Solid sales performance overall Positive year in continental Europe setting aside inflationary challenges faced Germany flat overall but weaker towards end of year relinquishing market share in pursuit of raw material inflation recovery Strong year in France, particularly Joris Ide brand Sales ( m) 2, ,998.2 % of Group Sales 63% 65% Analysis of YoY % Change Underlying Currency Acquisitions Total 12% -2% +7% +17% Netherlands performed well Solid volumes in Central Europe but chemical cost recovery proved more difficult While UK started well it then tapered off considerably towards year end with decreasing number of large scale nonresidential projects in the market Energy from Waste Facility, UK Insulated Panels 18

19 Insulated Panels (cont.) Low double digit order intake growth in US somewhat compensating weaker activity in Canada Marked step-change to position in Latin America manufacturing presence in Mexico, Colombia and four facilities in Brazil Tangible progress on Dri-Design and Quadcore specifications Challenging year for Middle East region with weakness in Turkey. However project pipeline remains healthy Australia impacted by competitor capacity expansion. New Zealand delivering well Ireland broadly flat year-on-year Grifols, Dokvast Dublin, Rhenus, Ireland The Netherlands Insulated Insulated Panels Panels 19

20 Insulation Boards Outstanding year for the division overall Excellent UK performance driven by price inflation, single digit volume growth and sharp shift in mix towards Kooltherm Continued progress across Continental Europe. New Nordics facility planned for 2019 North America XPS line commissioned in late 2017, expect return to growth in 2018 with new applications and extended product range Sales ( m) % of Group Sales 21% 22% Analysis of YoY % Change Underlying Currency Acquisitions Total +15% -3% - +12% Middle East performed well Kooltherm facility commissioned in Melbourne better serves the Australasian region Positive year for Kooltherm in Ireland facilitated by market shortage of PIR board High Speed Rail National College, UK Insulation 20

21 Light & Air Milestone year for newly formed division Europe performed strongly, particularly Germany and France North America less positive, giving up market share in Western US in early 2017 but pattern reversed by year end Sales ( m) % of Group Sales 6% 2% Analysis of YoY % Change Underlying Currency Acquisitions Total +1% -1% +170% +170% Expanded global presence through addition of CPI Daylighting in North America and Brakel in Europe Extensive site consolidation planned for French business in sales run rate circa 300m Eagle Academy, Washington, USA Light & Air 21

22 Environmental Strong year overall with ongoing improvement in profitability Excellent performance in Australian water storage business. Further benefit from acquired Rhino brand UK traditional product range and service activity performed well Sales ( m) % of Group Sales 5% 5% Analysis of YoY % Change Underlying Currency Acquisitions Total +2% -5% +14% +11% Solar and wind more challenging, likely to continue for the foreseeable future Global expansion and trading margin restoration key themes West Point Military Academy, USA Environmental 22

23 Access Floors Stable sales performance overall. UK performed well as a result of the strong orderbook entering 2017 UK backdrop weakened during the latter half of the year resulting in lower order intake in H Sales ( m) % of Group Sales 5% 6% Analysis of YoY % Change Underlying Currency Acquisitions Total +4% -4% +1% +1% Continued focus on expanding product offering in North America Pre-finished concrete access floors and data centre product set to provide key growth opportunity going forward Salesforce Office, San Francisco, USA Access Floors 23

24 Outlook 2018 got off to a relatively slow start but improvement expected through the first quarter Project postponements in the UK have resulted in panel order intake value being down over 15% since the start of 2018 UK sales volumes of Insulation Boards holding up reasonably well Other end markets remain in solid shape Trend of structural conversion to Quadcore and Kooltherm expected to continue in 2018 Evolving new frontiers and associated acquisitions to help counterbalance the near term weakening UK building environment Baltimore Tower, UK Environmental 24

25 Additional Information Grifols, Ireland Insulated Panels 25

26 Sales ( bn) Our Evolution - Revenue Focus on Specification Early introduction of high performance insulation and Building Fabrics CAGR 17.5% The Environment Building codes and incentives to lower carbon emissions Efficiency & financial returns

27 Millions M2 Panel & Board Sales Volume Rigid Board Kooltherm Board Insulated Panel Quadcore Panel 27

28 Global Organic Expansion 28

29 Key Innovations 29

30 Kingspan Insulates Better 30

31 Kingspan v Construction Macro UK US Western Europe Source: 1 UK Kingspan UK Insulated Panels + Insulation Board underlying sales, rebased for acquisitions; UK National Statistics Construction Output Non-Res data 2 US Kingspan US Insulated Panels + Insulation Board underlying sales, rebased for acquisitions; US Census Bureau Non-Res Construction Spending data 3 Western Europe Kingspan Western Europe Insulated Panels + Insulation Board underlying sales, rebased for acquisitions; Euroconstruct Non-Res data 31

32 P P P P P P Driving Penetration Growth Aim to change Building Practices / Material Choices INSULATED PANELS 100% 80% UK 100% 80% Germany 20% 15% North America 60% 40% 60% 40% 10% 20% 20% 5% 0% 0% 0% INSULATION BOARDS 50% 40% 30% UK 14% 12% 10% 8% Western Europe 14% 12% 10% 8% Australia 20% 6% 6% 10% 4% 2% 4% 2% 0% 0% 0% All above either relates to Insulation Panels or Insulation Boards penetration as a % of the respective addressable markets 32

33 Net Zero Energy 33

34 Dublin Road Kingscourt Co Cavan Ireland A82 XY31 Tel: Fax: